Claims Retrospective: Joining a Project that Already Involves a Dispute is a High-Hazard Area for which Specific Preparation is Necessary 

Every project has its complications. However, when an engineer begins a project that already involves a dispute among those involved, the perils may be hidden—or at least not readily observed.  Further, the very existence of the dispute may be a sign that the client or the other parties involved are particularly difficult to deal with or even litigious. Accordingly, it is best to approach these projects with caution and obtain as much information as possible about the project and the parties before agreeing to be involved.

Unless the engineer is a forensic engineer who specializes in providing services for imperiled projects, the engineer’s typical approach is unlikely to adequately protect him or her from some of the unique hazards involved with such a project.

First, the engineer should diligently research the parties involved, determining if the client and/or the other parties have adequate funds and experience to complete the project successfully. If the project is not successful, litigation will almost certainly follow. The engineer may also want to make inquiries into the reputation of the parties involved, as well as the insurance held by said parties.¹ If the engineer cannot obtain satisfactory answers to their inquiries and/or the information obtained is unfavorable, the engineer may not wish to proceed.

Next, assuming the engineer does want to proceed, the engineer’s standard contract may not address the added risks involved with such a project. The engineer’s contract should clearly delineate the scope of work, as in a typical contract, but also identify any parts of the design that are not within the scope of work, as well as any assumptions they are making about the work already completed. The latter may require the engineer to explain what materials they are working from and what they were able to observe and/or confirm, as well as what they could not observe and/or confirm.

Likewise, the engineer should make sure to include language in the contract that makes it clear the engineer is not responsible for the work that was done prior to involvement with the project, and perhaps even an indemnification clause whereby the client agrees to defend and indemnify the engineer from any claims arising out of such work if possible. The engineer should also be prepared to be involved in litigation not only as a possible litigant, but also as a fact witness. If litigation is contemplated at the outset, the engineer should address compensation for any future expert testimony, as this can be time-consuming and costly.

The engineer should also determine if they are comfortable providing expert testimony. If not, the project may not be a good fit for him or her. It is important to keep in mind that if the engineer performs design work for a project already involving a dispute and litigation ensues, the engineer cannot simply decline to testify, as their representatives and employees can be called as fact or even independent expert witnesses. Thus, it is important that the engineer understand the possibility and, in some circumstances, the likelihood (or even inevitability) of providing court testimony prior to agreeing to perform the subject services.

Finally, the engineer’s services should be performed with the understanding that litigation is more likely to occur during or upon completion of the project. For example, the engineer should be certain to document the conditions as they were found upon beginning work, as well as any construction observations with photographs and written reports. It’s also important for the engineer to provide the photographs and written reports to the correct parties, which again should be defined in the engineer’s contract. Particularly, the engineer should identify any nonconforming or unforeseen conditions and obtain written acknowledgement of the same, in addition to authority to proceed in light thereof, before proceeding with services.

Projects already fraught with problems and disputes are a high-hazard area. Proceed with caution and be prepared for involvement in litigation, whether as a litigant or a witness.

¹ Indeed, the engineer should seek permission from its client to contact any engineer and/or design professionals previously involved with the project. It is a red flag if such permission is withheld.